IP acquires Temple-Inland
International Paper (IP) has announced the completed acquisition of Temple-Inland, which will now become a wholly owned subsidiary of IP. Under the terms of the transaction, each issued and outstanding share of Temple-Inland common stock will fetch $32.00 in cash, including the assumption of approximately $700 million in Temple-Inland net debt. The total transaction value is approximately $4.5 billion.
The deal, which started as an unsolicited bid, became a hostile takeover and was then delayed by government regulators, comes with certain conditions. IP and Temple-Inland must agree to sell three containerboard facilities, in Central California, Tennessee and possibly Kentucky, to satisfy competitive concerns of the Department of Justice’s (DOJ) Antitrust Division.
Without these divestitures, consumers would pay more for containerboard and corrugated boxes, the DOJ said in a prepared statement.
“Corrugated boxes made from containerboard are used to ship more than 90% of all goods nationwide,” said Sharis Pozen, acting Assistant Attorney General in charge of the DOJ’s Antitrust Division. “With the mill divestitures, the transaction can proceed, and American consumers and businesses across the country can be assured that competition is preserved in this important industry that is vital to the U.S. economy.”
International Paper is a New York corporation headquartered in Memphis, Tenn. IP owns and operates 12 containerboard mills and 133 box plants that convert containerboard into corrugated boxes in the United States. In 2010, IP reported revenues of approximately $25.2 billion, with its North American Industrial Packaging Group, which produces containerboard and corrugated products, accounting for $8.4 billion.
Temple-Inland is a Delaware corporation headquartered in Austin, Texas. Temple-Inland owns and operates seven containerboard mills and 53 box plants in the United States. In 2010, Temple-Inland reported revenues of approximately $3.8 billion, with its corrugated-packing business accounting for approximately $3.2 billion. Temple-Inland also produces lumber, gypsum board, fiberboard and other building materials.
In some codes, more emphasis on ventilation
With the new requirement in the 2012 International Residential Code (IRC) stating that builders must install mechanical ventilation in all homes, it is more important than ever that builders understand what ventilation solutions are available, according to Mike Moore, PE, LEED AP, Research Associate, Newport Partners, LLC, Davidsonville, Md.
Moore was a panelist in the “Clearing the Air: Smart Ventilation for Today’s Tighter Homes” seminar presented during the recent 2012 International Builders’ Show (IBS) Green Building & Sustainability track in Orlando, Fla. The seminar addressed the importance of home ventilation and its integral role in green and sustainable building practices, and offered a primer on helping builders navigate through the many new building codes, standards and regulations.
“In the past, mechanical ventilation was optional in homes, but the new 2012 IRC code now requires mechanical ventilation,” said Moore. He explained that several states are already early adopters of the new IRC code – Maryland, District of Columbia and Illinois – and many other jurisdictions have this new requirement under review. “By the summer, we’ll begin to see this new code adopted by many more jurisdictions, and builders will be looking for assistance from manufacturers to help them select the appropriate mechanical solutions,” Moore added.
The panel was moderated by Karen Collins, APR, marketing communications manager, Broan-NuTone, LLC, Hartford, Wis. Other panel members included Brian Wellnitz, marketing manager, kitchen ventilation, Broan-NuTone and Patrick Nielsen, marketing manager, ventilation fans, Broan-NuTone.
In addition to the new 2012 IRC code, the panelists addressed the International Energy Conservation Code (IECC), ASHRAE 62.2 and CALGreen, offering tips on how best to communicate the importance of ventilation and energy-efficient building practices to homeowners. The panelists also shared some principles of air movement and how energy-efficient ventilation products, especially those that are Energy Star-qualified, save homeowners money.
Of particular interest to attendees was the discussion on proper ventilation sizing techniques and proper ducting required throughout the home. According to Moore, Broan-NuTone is the first manufacturer to develop an online tool to help builders identify code-compliant, customized whole-house ventilation systems, based on factors such as home size, number of bedrooms, whether or not the home is Energy Star V3 or LEED-certified and even homeowner preference. The Broan-NuTone CodeKey sizing tool will be available online this spring.
Bernanke to builders: More needs to be done
Orlando, Fla. — Federal Reserve Chairman Ben Bernanke, addressing a crowd of home builders on the last day of the International Builders’ Show here, did his best to explain how low mortgage rates — his chief weapon to stimulate the housing market — have fallen short of their goals. But Bernanke’s speech before a crowd of more than 200 attendees was not an apologie; on the contrary, Bernanke seemed a little frustrated about a lack of action in other government and business sectors and seemed worried about the overall effect of the housing crisis on the general economy.
“One of the effects of the decline in housing worth is to reduce the ability and willingness of households to spend,” Bernanke said. Underwater borrowers may have trouble paying for emergency health expenses, financing their children’s educations, or moving to a new location for a job opportunity because they can’t sell their current house.
“The state of housing and mortgage markets may be holding back the recovery of our financial system and the normalization of credit conditions,” Bernanke said. Although he acknowledged that lax lending standards helped precipitate the housing meltdown, now “the pendulum has probably swung too far in the other direction.” Current lending practices have been denying mortgages to creditworthy houses, even those who meet the standards of Government Sponsored Entities (GSEs). Private-label mortgage securities and their loan have virtually disappeared, Bernanke said.
“Lending to first-time home buyers has dropped precipitously,” he said, noting the ripple effect on move-up homebuyers.
With one-fourth of the excess supply of vacant homes for sales in the second quarter of 2011 owned by banks and other creditors — commonly referred to as REO properties — Bernanke worried that these homes will continues to exert downward pressure on home prices. The Feds estimate that an additional one million more foreclosure homes could be added to the REO pile over the next few years. In a “white paper” released last month, Bernanke’s staff outlined several proposals to get these homes off the market, converting them into rentals or turning them over to non-profit “land banks.” An REO-to-rental pilot program is currently under way, and the Feds have identified six other metro areas — Atlanta, Detroit, Las Vegas, Chicago, Phoenix, and Riverside, Calif. — where the concept could work.
In a question-and-answer session with the audience, Bernanke was asked how much he, as Federal chairman, could do to move forward on his ideas. The answer: Congress, the FHA and other government agencies will have to implement (or not) the proposals he put forth in his 26-page white paper called. “The U.S. Housing Market: Current Conditions and Policy Considerations.”
“Our goal was to put out there some main issues for people who have to make these decisons, and to make people realize how central to the economy housing is,” Bernanke said.
Bernanke’s staff is also communicating to the banks that now is not the time to be stingy.
“As regulators, we have been very clear to the banks that we do not want them to turn away creditworthy borrowers, and that includes home builders,” Bernanke said.